高级微观经济学Aggregation and WelfarePPT.pptVIP

Advanced Microeconomics lecture 7:consumption theory IV Aggregation and Welfare Content: Consumer’s surplus Aggregation Representation consumer. 1.Consumer’s surplus Money metric utility function measure the welfare of consumer in economy changing. Definition: equivalent variation (EV) and compensating Variation (CV): see the fig. Let 1.Consumer’s surplus Consider a changing only accurse in price of commodity 1. 1.Consumer’s surplus p1 x1 1.Consumer’s surplus x2 x(p1,w) x(p0,w) u1 u0 L1 x1 L2 2.Aggregation across consumers Can a society behave like a ration man? If a society behave like a ration man, can the utility of this “man” represented the welfare of society? Aggregate demand: Wealth distribution And total wealth 2.Aggregation across consumers Step1: , that means aggregate demand are independent on the distribution of the wealth. Proposition1:if and only if each consumer has a indirect utility function of Gorman’s aggregate demands are independent on the distribution of the wealth. 2.Aggregation across consumers Step2: how can the AD satisfied WA? Definition: ULD (un-compensation law of demand), Proposition2: satisfied ULD, then AD satisfied WA. Proposition3: consumers have the same preference, and their wealth non-increasing distribution on ,then AD satisfied ULD. 3.Representation consumer We can regard AD as a rational consumer. When can we measure welfare of society by the preference of this consumer? Definition: PRC (positive representative consumer) , there is a rational educing AD, then exist a PRC. 3.Representation consumer Definition: Bergson-Samuelson social welfare function: A merciful government distribute the wealth to maximize W. (*) 3.Representation consumer Porposition4: if w is the solution of (*), then the value function of (*) is the indirect utility function of PRC for AD. Definition: NRC (normative ~ ) , if w is the solution of (*), and the value functi